Eurozone hit by sharp drop in retail sales

The European Union’s statistics office said Eurozone retail sales, a good indication of households’ propensity to spend, fell 1.2 per cent month-on-month, the deepest fall since October 2008, for a 1.5 per cent year-on-year drop.

Economists had expected a 0.1 per cent monthly increase in retail sales in the 16 countries using the euro and a 0.2 per cent year-on-year decline. “A sluggish labour market, tighter fiscal policy and rising uncertainty about the economic outlook point to ongoing consumer weakness,” said Nick Kounis, economist at Fortis Bank.

Retailers in Europe have been struggling with falling food prices and shoppers refusing to up spending.